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Fiscal cliff: A primer

This steady decline is worrisome enough for market watchers, but Wall Street’s fears are unlikely to jolt lawmakers into action unless the Dow dives in a fiscal cliff panic, several senators said Friday.

“Sometimes a volatile market is what it takes to make them see the light,” said Sen. Tim Johnson (D-S.D.), chairman of the chamber's Banking,Housing and Urban Affairs Committee.

A market shock would “absolutely” add impetus to strike a cliff deal, said Ohio Republican Rob Portman. “People here are very attuned to the market,” Portman said. “We’ll see what it does Monday.”

There are already signs of market volatility over the cliff stalemate.

Friday afternoon, the Dow dropped 66 points, building on earlier losses, after cable news stations flashed headlines around 3:30 p.m. that President Barack Obama was not offering a new proposal in his 3 p.m. meeting with congressional leaders.

Overall, the Dow closed down 158 points, or 1.2 percent, on the day.

Market plunges have moved Congress to compromise in the past, most notably during the 2008 financial crisis. At the height of the crisis, the Dow plunged 778 points on Sept. 29, when the House rejected the bank bailout bill.

Five days later, a slightly amended version of the bill sailed through the House when almost 60 representatives — Democrats and Republicans alike — flipped their votes to back the bill.

A market plunge as large as in 2008 almost certainly won’t occur now because, unlike at the height of the financial crisis, there is no fear that the financial system is on the verge of collapse.

But senators fear a similar, if smaller, nosedive may be coming if Obama and congressional Republicans don’t reach a deal to avert the automatic tax increases and spending cuts set to take effect on Jan. 1.

“The market has been very unsteady the last few days, and I think there’s no reason for it but what’s happening here,” said Connecticut independent Joe Lieberman. “My fear is that if we actually go over the cliff, you’re going to see a precipitous drop in all the markets, particularly the stock market.”

Class war!!!!!! How does just raising taxes on those over $250,000 help out everyone else.

Spending has to be cut.(Deficits lead to inflation) The people on the bottom will need more Government help when inflation makes everything more expensive. I guess that means more voters for the handout!!!

Bye Bye Capitalism, here comes Socialism.

Look how well the people at the bottom are taken care of in other Socialist countries.

The market was probably just afraid that empty suit Barack would just turn the nations finances over to Harry Reid for a solution. Or it may be that Wall Street has awoken to realize that the 'cliff' is just a little bump in the road

Going off the cliff of course will effect Wall Street - too bad that is what will get Washington to pay attention and not how it effects all of us. Enough with all the games - we should have Washington work like a business. They come up with these things that sound good but if you peel the layers back they really aren't. We should require a business case for all laws with pros and cons spelled out.

It makes liberals and the poor feel better, punishing those who've dared to become successful.

Other than that, that extra $100 billion won't do squat for the fiscal health of the nation.

Anyone with the (apparent) nerves of steel it takes to accumulate such wealth would (one would think) be brave enough to handle parting with the same percentage as the scaredy cats who make so much less.

And someone who is so brilliant and superior to those at the bottom end of the earnings scale should be (again, one would think) bright enough to understand the concept of complicated and measured approaches to problem solving.

But then again, if thinking were all the rage, FOX wouldn't have the ratings they do.

It's early sunshine, go back to bed, rest, and come back to work later when you're better prepared.

While you're gone, nap on this,,,,John Boehner is going to swing hard left after he's reappointed.

You betcha.

Early to bed, early to rise...............

You see the thing is, unimpeded Progressivism is a proven disaster. California is the inescapable evidence of this.

D.C. polictics, and selective historic reviews, have all sorts of variables you Progressives try to ignore in making your claims.

I mean an article forged from the bowels of the Progressive Machine, like the one you posted from Slate, proves nothing other than the only way you can think is to get permission from George Soros and his crew.

Progressive run California trumps any attempt you could make. It's all liberal/progressive Democrat, all the time.

"Anyone with the (apparent) nerves of steel it takes to accumulate such wealth would (one would think) be brave enough to handle parting with the same percentage as the scaredy cats who make so much less."

Percentage wise, they part with more than twice the middle class, while those on the low end part with zero percent.